There are still a few lingering issues, which we've been working hard to fix and will be looking at again today. To those affected, I'm very sorry for the wait. Funds are safe, it's just a question of opening the pipes properly to let them flow normally.
Several pieces of the site scaled up about 10x in the past month or two, and this exposed some lingering performance problems. Somebody told us an analogy one time of rebuilding a car while trying to drive it down the freeway at 60MPH. That is a good approximation of what we're doing right now - in short, we are doing so carefully and with the help of great test coverage to make sure nothing breaks along the way.
Thank you your bearing with us. I wish I could say this is the last time we'll experience scaling problems in the next year, but it seems unlikely with the growth of bitcoin right now. If this seems like something interesting to work on, we are also hiring: https://coinbase.com/jobs
We'll post updates to Twitter as we come closer to a resolution. Thank you!
I think you guys will pull through in the end, but your communication is honesty bewildering.
You guys are still:
* Waiting until the last minute (after they've been waiting a week!) to tell people their accounts have been flagged as 'high risk'
* Not updating your blog with problems as they arise
* Being completely untransparent about the obviously-a-lie "24 hour rolling limit".
* Letting emails about people's already confirmed bitcoins being locked into your "wallet" go unanswered.
* Generally being completely opaque about both what is going on, and why people are getting flagged at the last minute.
My recommendation: charge more for your services and fucking hire some people to do some damage control--AND BE TRANSPARENT. It's great that you are in the reddit threads, and now on here.. but for the love of god, you are pissing EVERYONE off. There are people falling over each other to be your "customer support specialist" or whatever you were hiring for the other day; have them do some friggin' support.
i second eof's reply, especially the high risk issue, I "bought" 14 coins at 34.50, emailed support as soon as it flagged and you basically responded with "whoops, I'm Sorry".... Meanwhile I had left the funds in escrow for a week waiting for the order to clear when I could have bought them through another source at a slightly higher rate and still profited in a large way. Then I emailed support again when I found that another customer had posted they had actually had the order forced through by support due to the issue being on Coinbase's end. That was two weeks ago and I still have not received a response as to why the order was covered for another customer but not for me.
Im a Coinbase customer. I'm waiting for my pending transaction to go through, and for USD to hit my bank account. And I'd rather have Fred and the rest of Coinbase working on solving that problem than explaining what, exactly, the glitch is, and while they're at it, what their entire infrastructure looks like. There will be time for explanations later.
This is absolutely an issue that needs to be handled immediately. When there is real money involved, trust/faith is by far the most important factor. If there is any concern about missing money, people will lose faith in the service and usually stop using it. To give an analogy, consider what is going on in the minds of the Cypriots while their accounts are in limbo.
If anyone was thinking his transactions with a bitcoin exchange or their bitcoin account with some website was remotely as safe as a bank in Cyprus, we can't really call him a fiscally responsible adult...
I find your tone disappointingly arrogant, sarcastic, and dismissive, to a level which is not justified by your evident knowledge of the Bitcoin ecosystem.
You may, if you choose, maintain Bitcoin in an account in a Bitcoin trading site, but you can also send it to a Bitcoin address whose private key seed you've memorized ("brainwallet"), maintained on an isolated machine, or printed out on a barcode kept in a safe. While I don't trade Bitcoin, my Bitcoin-enthusiast friends use these approaches.
In short, Bitcoin trading sites do not provide the same service in the Bitcoin ecosystem that banks provide in the fiat-money ecosystem; they are more like Western Union or PayPal, as reflected in the FinCEN's new regulatory guidance this week.
In the future, at least on Hacker News, please attempt to engage in rational discourse like a civilized human instead of a 4chan troll.
I didn't read the comment as a troll or any of what you said about the tone. It seemed to me to be an accurate account of what has happened before: Bitcoin bank/exchange gets hacked or has other issues, and people lose confidence. This is empirical. To deny what 30 seconds of Googling and a review on BitcoinCharts.com confirms speaks to your "evident knowledge of the Bitcoin ecosystem".
You are right that you can store Bitcoins anywhere, and aren't restricted to banks/exchanges. However, this protects only the coins themselves, not the value. As things stand today, Bitcoins are only as valuable as you can trade them for fiat currency, or for products/services that continue to accept fiat currency. Where and how you store them has no impact on what the market is bearing as value for Bitcoins, and faith in the banks/exchanges plays a huge role (though there are other factors as well) in the market value.
Bitcoin exchanges provide a very similar role that banks play. They are a place to store money securely* and make sure it's easily available and exchangeable.
Just because you can stick money under a mattress (the equivalent to your memorizing a bar code) has nothing to do with the role of banks or marketplaces.
Bitcoin is supposed to allow you to send money to anyone given the address. The system itself is more like Western Union or PayPal. How are you making the claim that the exchanges are replacing them? That would mean they do nothing on top of the basic idea of Bitcoin.
*Banks and bitcoin marketplaces get robbed, there is an illusion of security to some degree, except banks get things like FDIC insurance.
> [Banks] are a place to store money securely* and make sure it's easily available and exchangeable.
Not at all--what you're thinking of are "wallets." :)
Banks are places we put money to prevent it from losing value. Money kept in a wallet (or under a mattress) steadily loses value because of inflation. A bank counteracts this by loaning out the money we give it (earning it money on interest), and then paying us another, smaller interest rate for our deposits in turn, which will offset inflation to whatever degree. Other entities also do this--mutual funds, for example--but banks do it while also making our money still somewhat convenient to re-liquidate and transfer; others may require, for example, 30 days' notice to facilitate withdrawal.
One thing that's very interesting about Bitcoin is that, once it's all mined out, there won't be any inflation (or deflation) of its supply--the amount of Bitcoin out in the world will become effectively fixed. This means that, by and large, "banks" (in the "savings bank" sense; investment banks are a separate beast) are pretty irrelevant to a Bitcoin-based economy: there's no need to protect the value of your money; it's stable just sitting in a wallet.
This property of Bitcoin might do strange things to the global economy if Bitcoin becomes more widely adopted. In effect, it would be a global version of what some Eurozone countries have experienced, where they have control over their fiscal policy (taxes and spending), but no control over their monetary policy (ability to print money.) It's common wisdom in Economics that at least a little bit of inflation is good--otherwise people tend to hoard money instead of investing it ventures that improve GDP. In a wholly-Bitcoin economy, there's no particular fear-based incentive to invest over just sitting on your money. (There's still a greed-based incentive to invest with banks for increased risk = increased reward in good economic times, but in times of economic volatility, the "flight to quality" toward stable Bitcoins would be absolute, moreso than treasury bills or gold have ever been.)
This is simply spinning the story into the bitcoin manifesto if I ever saw such a thing.
Banks keep money secure. Wallets don't.
You seem to operate entirely in a world where inflation is the only thing that occurs. You ignore the fact deflation can and has occurred. Japan, for example, has experienced prolonged deflation and continues to face it today. So under your hypothesis, banks shouldn't exist in Japan because they are a place we put money to prevent it from losing value.
You also seem to be confused by monetary supply and its relationship to inflation and deflation. Just because a supply is fixed doesn't mean inflation and deflation don't happen. Look at price stability when we were under the gold standard. Under your assumption we shouldn't worry about price volatility, except we experienced worse shocks while under the gold standard than without it. Inflation and deflation aren't inextricably linked to monetary supply. People play a large role, you can print infinite money but if people are afraid to spend it, you still won't experience inflation.
On a side note, it continues to amuse me to watch Bitcoin and the people who are passionate about them rediscover all the things banking discovered over the past few thousand of years. The ideas are hardly new and have been tried, yet the results are ignored.
I should say, I didn't realize Bitcoin even has a "manifesto." The only things I know about Bitcoin come from studying it as part of my job: I'm developing an MMO, so I'm interested in the economics of virtual currencies. MMOs by-and-large have fiat, non-scarce virtual currencies (money just gets "spawned" from the aether in response to certain things, with no matching debt on any balance sheet) which is a bit of a mess. Bitcoin is a scarce (eventually-fixed) "natural resource" virtual currency, which provides interesting contrasts.
I think we fundamentally agree here--we're just using different words. You're saying you put money in a bank to "secure" it--secure it from what? Losing value. Cash under your mattress loses value from inflation. Stocks lose value from investors losing confidence in them. Your wallet loses value when you get mugged and the dollars are taken out of it. (An encrypted digital wallet is somewhat resistant to this.)
And how do banks secure you from loss, compared to all those other things? Besides being big thick concrete buildings with guards, they mainly lend your money out to other "safe bets" to earn "enough" interest to offset your inflationary losses. Note, I didn't say they put you in the black; they just offset your loss compared to what it would be under your mattress, while not notably increasing your risk.
During the 2007 banking crisis, people were buying US treasury bills that offered negative interest. Why? Because a small known loss was considered to be less risky than the possible loss from anything the rest of the market was offering. People using Japanese banks are currently operating under the same principle: they would rather put their money in the place it will lose the least value.
Another way to say this is: savings investment is a minimax algorithm ("minimize maximum loss.") In a thriving economy, you can minimize maximum loss with a positive net return. In a bad economy, it will sometimes require a negative net return. Either way, integrating over the probability distribution will put you in a future where you end up with the most money, compared to all your other selves who made riskier bets with higher returns, or less risky bets with lower returns.
Now, in turn, the whole economic theory on the necessity of inflation is that it moves the minimax risk-optimum for perfectly-rational actors from "hoard" to "invest in very slightly risky ventures"; and the whole reason deflation is so scary is that it moves the minimax risk-optimum for perfectly-rational actors from "invest even when it's a sure thing" to "sit on it and let it appreciate."
Now, of course, humans on average aren't anywhere near "perfectly rational"--and in some cases we may create artificial situations where the risk-optimum is shifted this way or that. For example, corporations seek short-term (usually single-quarter) gains, to encourage stock growth. Short-term gains are more found in risky investments than stable ones; and being paid in bonuses rather than equity encourages "smart-looking-for-now" behavior that will let one earn their bonus and cash out, even as the company hits the risk head-on and sinks.
> People play a large role, you can print infinite money but if people are afraid to spend it, you still won't experience inflation.
Blah blah Keynes blah government stimulus blah blah. Not getting into that. :)
> Under your assumption we shouldn't worry about price volatility, except we experienced worse shocks while under the gold standard than without it.
No, quite the opposite--"much worse price volatility" is exactly the sort of thing I meant by "a global Bitcoin economy would be strange." No monetary policy means no quantitative easing, which is specifically deployed to decrease volatility.
Inflation and deflation, of course, would still occur--"money" is nothing more than the value of an liability on a balance sheet, measured in the unit of a particular currency; as we leverage the money we have as investments into other things, the economy has more IOUs and therefore more money, whether more physical currency is getting printed/minted or not. And when things get de-leveraged, that money goes away.
The thing that makes Bitcoin interesting is simply that, as a "natural resource" currency, the "base supply" of unleveraged money can't grow to meet demand. If everyone wanted to withdraw their leveraged BTC-united wealth at the same time into "actual Bitcoins", they simply wouldn't be able to.
If we still operated mostly with physical currency, this would indeed be similar to the horrors of the Gold-standard era, where if a country 'ran out of money', it couldn't just write down a deficit--it literally would have no tokens of currency to send abroad to receive goods in trade, and its people would starve simply for want of some gold in a drawer in a bank somewhere.
As far as I can tell, Bitcoin proponents just counter this by saying that we don't operate mostly in physical currency--so we could indeed transfer a trillion BTC to Cyprus, or so forth, even though a trillion BTC don't "exist." It would simply be a new asset on our balance sheet, and a new liability on theirs. The only thing that would change is that the unit was BTC instead of USD.
Still, that's a bit silly. Every day, we have more people using more USD for more things (this is what a growing GDP means, basically.) Having a fixed supply of USD, even as we have a growing number of people wanting to use it as a token of trade, would be very annoying. There's nothing that would make BTC different in that regard. (The proponents will say that "well, you can subdivide BTC to eight decimal places"--but even then, if I have an IOU saying "1 trillion BTC", subdividing physical BTCs won't get me any closer to being able to "instantiate" that trillion BTC in the real world. And if I can't do that, I can't take the BTC IOU your government sent my government and actually spend it on anything. So we're back to the starving-for-want-of-gold-in-a-drawer problem.)
If you can't tell, I don't actually think running the global economy in BTC is a particularly good idea. In fact, I don't think using Bitcoin as a currency is a particularly good idea. Bitcoin's ideal place in the economy, in my view, would be as a permanent, synthetic "commodity" to be traded on the commodities market--basically, a replacement for what people currently use gold for, but with an absolutely fixed supply.
In that role, Bitcoin-the-traded-commodity would still be able to serve its current function--basically, something you turn money in one currency into, to give to someone else in complete anonymity, who then turns the BTC back into money in their preferred currency. (You can also do this with gold, obviously. Bitcoin, then, is just "a strange precious metal that weighs next to nothing, takes up next to no space, and is easy to send to someone by typing it into a computer through a keyboard.")
But commodity-traded Bitcoin could also serve as a good unit to normalize prices against, rather than just measuring them in USD as we do now. You could value currencies in BTC, value stocks, value stock markets--even value products at the supermarket. It would basically be a global version of the Brazilian Real concept--setting prices stable with respect to the inflation or deflation of any given currency. (The store shelf would say "3.00 BTC", and then they'd have a "current exchange rate of BTC to USD" posted--or it'd all be figured out by our ubiquitous smartphone gizmos. Admittedly, going this far is a bit of a hassle if your country isn't experiencing hyperinflation, but it does work everywhere, and that feels sort of elegant to me in the same way a nice, concise algorithm does.)
This "absolute measure" could also make people take notice of the competitive devaluation spiral that the USD and the RMB have gotten into recently. :)
I might try this in my MMO, actually. Set up a fiat "fixed-supply" commodity and then normalize prices in units of it, even though you're paying for things with non-fixed-supply currencies.
"A bank counteracts this by loaning out the money we give it (earning it money on interest), and then paying us another, smaller interest rate for our deposits in turn, which will offset inflation to whatever degree."
That's only true if your money is an interest-bearing account. Most consumer accounts are not.
Chequing accounts (non-interest-bearing accounts, used primarily for their other conveniences) are an instance of a bank providing a (traditionally) not-bank service.
Basically, chequing accounts (and all their features: cheques, wire transfers, EFTs, cross-bank ATM withdrawal, etc.) are forms of remittance: a service where a group of people get together and agree to maintain an 'eventually-consistent' balance-sheet between them. Alice goes to one member branch of the remittance group and gives them $N (plus a transfer fee $F) to send to Bob, who may be anywhere else. Bob goes to a different member branch and gets his $N. $N is transferred from the pool to the branch Bob went to to cover their loss, and then $F is split between the group.
Remittance has never really been a function you would expect a "bank" to provide until quite modern times; banks tended to be single-branch, holding the deposits of the people who put them in that bank. You could get someone else's deposits from a bank if they had them turned into a bank note and gave that note to you, but to withdraw it, you'd have to go to that bank. (Greenbacks--federal bank-notes--were a clear innovation from this system. Imagine, a system so bad for holding and transferring value that "cash" is an improvement!)
When a bank temporarily ran out money to cover its outstanding liabilities (withdrawals), it didn't ask to be paid from some pool--it just took out a loan with a neighboring bank. (This still happens, and it's the basis of one of the very important numbers in Macroeconomics: LIBOR--the London Inter-Bank Exchange Rate, which measures the average interest banks will ask for when giving out those bank-to-bank loans, and which is built into the base of pretty much any other loan interest rate you might look at.)
Eventually, though, wire transfers plugged banks directly into one-another's balance sheets in a way they weren't before, and banks could suddenly outcompete all the traditional remittance providers because, unlike the remittance providers, they already had pretty much the whole population of each city/town they served as members. It's like Google suddenly realizing they could do ads when they already had so many eyeballs specifically looking for things to purchase online: it went from "fun idea" to "main money-maker" in the span of a few years.
But that still doesn't mean that that's what it means to be a bank, or that Bitcoin "banks" make any sense. Bitcoin remittance providers, sure--but nobody ever figured it was a good idea to keep their savings with a remittance provider ;)
It's also discounting fractional reserve banking. Banks loan out many times the money you give it. These days 10 time more loans than capital is considered good, 100 times is the practical maximum you see (except in problematic cases, Greece Spain and the like).
That's why most loans specify that you can't withdraw the money into cash. Even 1% of people doing that would be a "bank run" and bankrupt the bank.
"Fractional reserve banking" with a 10% reserve does not mean that if depositors deposit $1M, the bank then lends out $10M. It means that if depositors deposit $1M, the bank retains $90,910 as a reserve and lends out $909,090. That's how the bank "loans out ten times the money it has".
Note that where before we had $1M of "money", now we have $1.91M of "money": the actual money provided to the borrowers, plus the on-demand deposits of the depositors. But the borrowers will probably deposit the borrowed $909,090 in their own bank, which can then lend 90% of it out again. If this procedure is carried out to the limit, you do eventually have 11 times as much "money" floating around the system as the "original" deposit, so the banks in aggregate have loaned out ten times the money originally deposited.
What is this about "most loans"? Generally when I've taken out a loan, the loaned money has been spent in something equivalent to cash rather quickly — generally in the form of a transfer to another bank via cashier's check, but that's equivalent from the point of view of the bank!
Not sure if my story syncs up with what everyone else is seeing:
-I purchased 10 coins on the 14th.
-Money came out of my account on the 18th.
-They said they were available to me on the 20th via e-mail
-Have tried multiple times to send money to external wallets with no success
-My account balance went from 10 to 0 to 10
-Support has been horrible
As much as I love MongoDB it has way too many issues to use it as a primary data store for financial transactions. I hope they backed up and tested their backup recovery. Something tells me they're dealing with a data corruption/loss which wiped out their master and slaves without a backup. Perhaps if they've got decent logging they can piece it together with logs.
I barely trust MongoDB with my personal projects. It's shot me in the foot enough given they're not a very stable vendor (case in point, see the 2.4.0 replication bug -- we didn't get hit by that thankfully).
We've had issues where databases can get on divergent paths, then MongoDB will keep up to 300mb of the stuff it can't match in a directory and after that you're hosed.
I wish I would have seen that they use MongoDB before using the site.
My account has data inconsistency issues. They are letting me double-sell coins, which makes me wonder if the first sale went through (at $70). Also, I have experienced up to 48 hours delay in sending BTC transactions out from my coinbase wallet. These sound like Mongo problems and they wouldn't be the first to have their Mongo databases fail under load. I am making screenshots of my major transactions to ensure that they are not lost. Hopefully they have the logs to get everything in the correct state eventually.
"Now I've contracted hemorragic e-coli from cleaning cow stalls and I'm bleeding out my asshole. I'll be dead soon, but that is a welcome relief. I will never have to witness the collapse of the world economy because NoSQL radicals talked financial institutions into abandoning perfectly good datastores because they didn't support distributed fucking map/reduce."
It's possible that they've been undercharging for their service, and as a result have simply run out of cash. With the recent price growth, their buy price sometimes fails to catch up with the current exchanges rates, resulting in losses for them that their fee of 1% does not cover for.
My friends trying Coinbase have raised concerns about the long delays as well, and I have a bitcoin transfer to my personal wallet that's been pending for multiple days. This needs to be resolved quickly to keep Coinbase and Bitcoins reputation.
>Or just raise more money hoping that the price of a bitcoin will stabilize in the near future.
Using a business model entirely dependent on the best case scenario would not be wisest play they could make. Even if BTC did stabilize, we now know market prices like this are not guassian but fractal/power-law based. Infrequent but sudden unexpected extreme volatility is a natural characteristic of such systems.
A better idea would be to develop a business model that at least expects that and does not fail when it happens, or at best exploits it.
>This needs to be resolved quickly to keep Coinbase and Bitcoins reputation.
Bitcoin's reputation has survived much worse. Mt.Gox hacking, Bitcoinica hacking, and several others. Bitcoin has intrinsic value independent of the private company infrastructure that springs up around it, no matter the foibles of the latter.
Coinbase's reputation on the other hand, is another matter.
I don't think that exchange rates/fees is it. I've had some purchased coins in my coinbase account for over a month. Tried two days ago to transfer to an external wallet. Still pending. That shouldn't have to go through any cost really to transfer it right?
If they're letting you "lock in" a buy price and then waiting for the incoming funds transfer to settle up, then they must be floating funds somehow, right? It might also explain the whole "we can only sell so many Bitcoins in a 24 hour window" thing.
I'm wondering if this has bitten them really hard during the runup.
IIRC, Coinbase has a founder and an engineer, which doesn't excuse non-responsiveness, but is probably the reason. They're probably hard at work trying to deal with this problem, and haven't prioritized support or notification of affected customers. That might have been a good choice if the fix only took a few hours, but as it's dragging on a bit, it's probably better to take some time out from fixing it and communicate with customers.
I hope they figure this out soon. This is the kind of thing that scares me and the primary reason that I decided against speculating in bitcoins. For someone like me who can't really afford to lose a lot of money, I need to trade in historically stable stuff (even if they are as rigged as they are..).
I don't really understand bitcoin very well, that is reason #2. I hope the Coinbase folks though have a solid grasp of it and can fix this otherwise this is going to look very bad.
If you can't afford to lose your investment, you shouldn't be investing at all.
I doubt they would have let Madoff use this excuse.
I'm not saying these dudes are anything like that jackhole, but rather that there is a difference between the risks inherent in the security or commodity (in this case bitcoin) and the counter-party risk of your broker screwing up the bookkeeping. Coinbase have made the latter risk appear significant.
If you said this was a poor example, I would at least understand what you're trying to say, but how on earth is Madoff a straw man in this instance? Try to to separate your [legitimately] dim view of Madoff from the fashion in which his example illustrates the phenomenon of counter-party risk.
>If you can't afford to lose your investment, you shouldn't be investing at all.
While I generally agree with that statement, it's a bit of a red herring in this context. That is, it typically applies to the notion of risk in the investment itself, not the risk that the intermediary or exchange will simply "misplace" your investment or your cash.
I'm a Coinbase customer, and as an additional data point, their customer service has been wonderful. Now granted, this was about a month ago. I did send them an email on Thursday and haven't heard back from them, but my request wasn't urgent, so I haven't thought much of it.
Overall, I'm rooting for them, and being YC backed, I'm confident that they'll figure out their issues. I do hope sooner rather than later, as I can't wait to use their API.
It's a very relevant fact (after all, this is a YC site and Coinbase is a YC company) that was explicitly removed by a moderator, and the action feels like dissociation. Can you present a better explanation?
I'm happy the post achieved it's intended effect, which was to get someone at Coinbase to respond. So yeah, I'll be the first to admit that I abused the HN post by turning it into a defacto customer service request instead of something newsworthy.
But, on the other hand, this is somewhat newsworthy. You have a company trying to start up in a very tough space where you need to be super-reliable and super-transparent. Coinbase's actions this entire week were neither. Let me repeat that important middle part. An entire week. This is not an "OMG my transaction took a day instead of an hour!" for one or two people.
It's not like I was posting a customer service request for myself. Look at twitter and you'll see a lot of people with troubles greater than mine.
Perhaps I should have prompted some Bitcoin-related blogger to write a nasty post and then link to it? Would that have turned the post into a "news" one and passed the gate?
"That convention is for company names that appear in headlines of stories."
The guidelines state: "In titles, please don't describe things by their relation to YC unless they're actually associated with YC."
AFAICT Coinbase is associated with YC, so the appearance makes perfect sense.
"Strictly speaking I should have killed the post entirely"
The real question is why it took an HN post that reached the frontpage to see any sort of response from coinbase. If you read the comments and the original assertion "because nobody trying to trade with Coinbase can get a public answer", it seems like people have tried other means and couldn't reach anyone at Coinbase.
This is a lesson in how intellectual dishonesty works. You quote the HN guidelines, and you quote PG's reference to them ("strictly speaking...") but you omit the guideline to which he was obviously referring:
please don't use HN posts to ask YC-funded companies questions that you could ask by emailing them.
Instead you change the subject with "The real question is..." when, in fact, that wasn't the question. The question was about title changes. No doubt a dozen more "real questions" are waiting in the wings.
There's no way PG can win this game of whack-a-troll. I'm surprised both that he even tries and that he doesn't snap more often.
Frankly, I think a firehose of ridicule is the last thing this site needs, and I'm sad when I see it upvoted.
I'm inclined to engage in that kind of interaction myself, having learned somewhere along the way that it's what a certain kind of intelligent person does. So I thought it was something to emulate. But I've been re-examining that assumption, largely in reaction to conversations I've seen on HN. I try not to engage in rapid back-and-forth threads that go more than a couple of posts deep. And I try to keep snark at a minimum. Sometimes I fail, but when I do I feel guilty about it, like I'm dragging the site down. I do not feel like I'm accomplishing something with it.
On the other hand, I feel free to be snarky on Reddit since that site is hopeless anyway. :-)
We often see laments about the declining quality of conversation on this site, and I believe such rapid-fire exchanges from leaders in the community are a contributing factor there. It sets a bad tone.
In that context, what's being discussed is the renaming, for which PG replies by saying "That convention is for company names that appear in headlines of stories." and pointing to the news guidelines. The rest of the post is a non-sequitur.
I replied by pointing to the only part of the guidelines that discuss titles.
Now you tell me who is being intellectually dishonest :)
Yes, the subject was title changes. That's why your comment, "The real question is why it took an HN post that reached the frontpage to see any sort of response from coinbase" was a change of subject. My point is that such an ammunition-refill reveals underlying intent.
You are accusing me of intellectual dishonesty which started from PG not addressing the question of title changes.
The only statement he made on that point is:
"That convention is for company names that appear in headlines of stories."
And in pointing to the guidelines, there is something that is relevant to the titles: "In titles, please don't describe things by their relation to YC unless they're actually associated with YC."
So he didn't give a response that explained why the title was changed. He thinks the issue is between "killing the story" and "renaming the title". But if he thinks that killing the story is a way to respond, that suggests he doesn't appreciate the severity of the situation.
I've seen a similar situation before with much more money (15M) so I know how frustrating it is to wonder if you will ever get your money back and to plan for lawsuits. In my case, it took complaints to SEC to get them to finally return the money. You may think this is a trivial issue, but it's very hard to re-establish trust once it is lost.
Back on point, I don't think PG appreciates the severity of the issue at hand.
Please point to an example of a criticism of AirBnB or of Dropbox in which the submission title originally had (YC '*) in it and was edited to remove the YC association. I and many other would like to see it.
No, actually removing context from headlines, reverting them to original titles, or even completely changing the link target is a long-standing tradition on HN. It's not reserved for YC-related news. And it has been happening more often lately. Is that a policy now?
It's not a big hurdle or anything but does take away a bit from the convenience of scanning new content. Those editorialized titles often contain the reason why a submission is relevant, or, like here, what is the "claim to fame" of participants... that's one of the benefits of having humans post those links.
Oh, definitely. Those are all positive news about a YC company. That's why it's totally kosher and no moderator would ever dream of stripping off the association.
This article, in contrast, is about a company potentially looting users' bitcoins due a mysteriously long response time and users being unable to withdraw. Obviously mentioning the YC connection is completely inappropriate. We need to remember here, that this site is solely for the celebration of YC companies, not to point out that YC potentially funded a bad apple that's screwing it's customers.
They are actively hiring for customer support if anybody wants to tackle the job of improving this situation: https://coinbase.com/jobs
I know it's real money and people flip out but try to be understanding of their situation. Their business is exploding and they're moving 1,000 miles an hour in an industry that is literally being invented as we speak. Hiccups should be expected.
I like what Paul Graham is trying to do, and I don't actually think one obvious bad call constitutes "jumping the shark". If terrible, stupid decisions constitute shark-jumping, then I shouldn't have any limbs left.
However, I strongly dislike Bitcoin (obvious scam) and don't know why YC would gamble its reputation in such a degenerate way as to associate with it. Also, I felt the world could use some crude ASCII art.
PG already answered your exact criticism . He's playing the extreme long tail "black swan" odds.
"I don't know what fraction of them currently raise more after Demo Day. I deliberately avoid calculating that number, because if you start measuring something you start optimizing it, and I know it's the wrong thing to optimize.  But the percentage is certainly way over 30%. And frankly the thought of a 30% success rate at fundraising makes my stomach clench. A Demo Day where only 30% of the startups were fundable would be a shambles. Everyone would agree that YC had jumped the shark. We ourselves would feel that YC had jumped the shark. And yet we'd all be wrong."
Good-faith business failure is fine. It's excellent, insofar as it's a byproduct of something very good: taking risks in a world of convex payoff.
Associating with a Bitcoin startup is a different story. Bitcoin is a sleazy scam designed to enrich people who got in early and sold at the top.
It's not a problem of making a call that fails. That's going to happen in this business. It's the taste issue. Unless they were something else in their YC application and became a Bitcoin startup, they should have known better.
Fwiw I'm genuinely curious how people who are convinced BTC is a scam see it playing out. Generally, once a scam is exposed, it collapses, so what does that look like with bitcoin? But if that's too OT, I'll save it for another thread.
Early entrants in the market extract profits, leave the "currency" to deflate back to Flooz valuations. At a certain point in the life cycle of things like BTC, trading takes on a life of its own. I'm sure tulip traders could have given you an impassioned defense on the intrinsic long-term value of tulip bulbs during that bubble, too.
He wasn't critiquing snarky jokes, he was critiquing the fact that your snarky joke was badly constructed and didn't correctly cut to the point you were trying to make. Which means your snark, instead of reading as funny and biting, read as trite and less relevant.
Maybe I need to take a break, lest my snark jump the-- no, that's too obvious.
My point was, "If Y Combinator is actually funding Bitcoin startups, they're dipping into the taint-bottom of the barrel and need to take stock." I thought that some Ascii art might lighten the mood surrounding cultural calamity. Funding good-faith business failures is inevitable and fine-- it's an unpredictable game-- but funding Bitcoin is an obvious sign of a decision not given enough time.
Of course, he and you are right that the shark-jumping metaphor is clumsy if we're looking for exact correspondence. Incubators work in parallel and a single bad decision is macroscopically inconsequential. It's not like a sequential narrative (from which the shark-jump motif comes) where one bad segment can set the whole thing off. I didn't actually mean that this suggests terminal decline, only that YC miiiiight want to be more thoughtful/selective if it's actually at the point of funding Bitcoin startups.
Anyway, I'm off to go create a currency out of mediocre Internet humor. It's called BitClown. Anyone want in? 0.1% equity, unlimited vacation, free beer and abundant bad jokes.
Bitcoin is not an "obvious scam" any more than the world is obviously flat, or fiat currencies were obviously going to fail. Remember going off the gold standard? Probably not, but lots of people considered it an "obvious scam." Perhaps it is, but it certainly has been a long game.
While early adopters surely have made an enormous profit, it is not a scam, and has a significant chance of being a major player in the world economy.